Bill Frezza is a 35-year veteran of the technology industry. After graduating from MIT with degrees in both science and engineering, Bill spent his early years at Bell Laboratories. Since then, he has worked as a product manager, salesman, marketer, entrepreneur, consultant, technology evangelist, and venture capitalist. Bill holds seven patents and has been investing in early-stage tech startups for the last 17 years as a partner in a venture capital firm. Since 2008, he has been writing weekly opinion columns for publications such as RealClearMarkets.com, Forbes.com, the Huffington Post and Bio-IT World and appeared regularly on TV and radio outlets, including CNBC, Fox Business and WBAL. In 2011, he was a finalist for the Hoiles Prize for excellence in American journalism and in October 2013, he became the Competitive Enterprise Institute’s 2013-2014 Warren T. Brookes Journalism Fellow. In January 2014, Bill began hosting RealClear Radio Hour airing Saturdays on Boston’s WXKS 1200AM & WJMN 94.5FM-HD2.

Governor Walker's Victory Spells Doom For Public Sector Unions

Public sector unions have reached their high water mark. Let the cleanup begin as the red ink recedes.

Despite a last-minute smear campaign accusing Scott Walker of fathering an illegitimate love child, the governor’s recall election victory sends a clear message that should resonate around the nation: The fiscal cancer devouring state budgets has a cure, and he has found it. The costly defeat for the entrenched union interests that tried to oust Walker in retribution for challenging their power was marked by President Obama’s refusal to lend his weight to the campaign for fear of being stained by defeat. We’ll see how well this strategy of opportunistic detachment serves in the fall as Obama reaches out to unions for support.

This fight is not without precedent. Progressive patron saint Franklin Delano Roosevelt—who more than any other president set our country on a course away from the founding principles of limited government—knew that public sector unions would be the death of the social welfare state he worked so hard to create. Hence, he consistently opposed allowing government employees to unionize. Today, Greece sets the example of what happens when public sector unions gain the upper hand.

In 1959 Wisconsin became the first state to allow collective bargaining by government employees. The projected cost of supporting Baby Boomer union retirees now threatens to bankrupt the state, as it does many others. Scott Walker ran for office promising change. The fiscal medicine he is administering may be bitter, but it looks like it is starting to work. The state budget has been balanced. The unemployment rate has been dropping and is now below the national average. Property taxes are down. Fraudulent sick leave policies—which allowed employees to call in sick and then work the next shift for overtime pay—have been ended. The government has stopped forcibly collecting union dues from workers’ paychecks.

Best of all, the myth that union bosses represent their members’ interests has been exposed as a lie. Now that union dues are voluntary, tens of thousands of union members have stopped paying them. Membership in the Wisconsin chapter of the American Federation of State, County and Municipal Employees union (AFSCME) has dropped by half. Membership in the state’s American Federation of Teachers (AFT) is down by over a third. Given unions’ influential role in most elections, the national implications of this trend are staggering.

Walker’s message is clear: The key to bringing balance back to public sector labor relations and balance state budgets is to break the iron triangle of closed-shop mandatory unionization, compulsory dues collection, and oversized campaign donations to politicians that promise to do the unions’ bidding. If other governors take his cue and take up the cause, that giant sucking sound you hear will be the air coming out of union bosses’ bloated political action budgets.

The work in Wisconsin is not complete. The controversial law exempted police and firefighters, a political concession to get the legislation passed. Federal courts have zeroed in on this anomaly, striking down certain sections of the law because they do not treat workers equally. This needs to be repaired— by rescinding the exemption for public safety workers. With the recall election behind him, Walker may be sufficiently emboldened to do just that.

The power of private sector unions was long ago broken by many heavily unionized companies going bankrupt. While this was painful for both workers and shareholders, the economy motored on as nimbler non-union competitors picked up the slack. This approach is problematic for the public sector because bankrupt state and local governments cannot be replaced by competitors waiting in the wings. Yes, citizens can always vote with their feet, emptying out cities like Detroit, leaving the blighted wreckage behind. But isn’t Walker’s targeted fiscal retrenchment less painful than scorched-earth abandonment?

Chicago machine candidate Barack Obama rode into office to the tune of Hail to the Chief, promising the unions that backed him the gift of card check elections, ending the secret ballot that shields employees from union intimidation. He may well ride into retirement to the tune of On Wisconsin as the era of closed shop unionism comes to an end.

Bill Frezza is a Boston-based writer and venture capitalist. You can find all of his columns, TV, and radio interviews here. If you would like to have his columns delivered to you by email, click here or follow him on Twitter @BillFrezza.

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This is good news in the war…yes it is a war, against the “progressives” who are nothing more than communists who had to re-brand themselves after the fall of the Soviet Union. The facts related to rejection of compulsory participation in unions stated in this article is especially encouraging. I hope this trend continues and if little jimmy hoffa is reading this… sukit fatboy!!

Well said, Bill. The only thing that I’d add here is how repulsive the entire recall was from a civic/democratic standpoint.

Shouldn’t recalls be limited to situations where an elected official is incapable, unwilling or too corrupt to continue holding office? Elections, as has been said, have consequences. The main one is that the people speak and the majority rules. Once decided, the idea is (or at least I *think* it is) for everyone to band together and live with the majority’s decision.

If recalls are too be held simply because a group doesn’t agree with the decisions or policies of the majority-elected official, we’ll be seeing recall movements for every official, all the time, ad infinitum – a serious waste of resources from money to mindshare.

Let’s reserve the recall process for its intended purpose and dispense with these capricious actions that are so costly from a financial, time and lost productivity standpoint.

Union members by an large are too busy to understand the effect of the poisoness work rules put forth in many of their contracts. These rules do two things. They give the Union bosses something to do and is the basis of what the members are forced to pay in dues. If members received a breakdown on the costs associated to protect these onerous rules they would collectively refute the rules which only protect a small percentage of their brothers/sisters who would really be better off working somewhere else.

Samples of many of these awful work rules which the Bosses protect will bring to light the reasons why the union movement is mired in great disfavor. Union workers must be separated from their bosses who at great cost merely featherbed on their members dues

Great effort should be made to educate Union Members as to why they’re held in such contempt. Work rules are one of the many reasons.

It’s high time the state unions be taken out, its not fair to the taxpayer funding all this garbage which is basically a ponzi kickback to the liberal democrats for there re-election bids. Walker should investigate the democrat sleaze bags and where all the funds went to. I sure hope this applies to that corrupt teachers union also. that is where most of the filth and kickback schemes originate from.

This election was about pure power politics. Nothing more. I agree that public unions are getting retirement benefits that are unsustainable but this election was about breaking the ability of public employee unions to contribute to Democrats in large amounts. Mission accomplished. Walker won’t go after the police/firefighters either. Police unions tend to lean heavily towards the GOP. Walker isn’t about to punish his supporters.

Private unions are largely already irrelevant as they only compromise ~7% of the US private workforce and their contributions to Democratic candidates have greatly declined over the past 20 years as a source of overall Democratic election fundraising. This is just kicking one more leg off the key Democratic funding source. It is the reason why the GOP outraised the Democrats by over an 8:1 margin and had key GOP politicians constantly coming to the state. Walker is at the vanguard at what the GOP is trying to push through at the state level especially in battle ground states like Wisconsin.

If the GOP can ever pass tort reform and handicap trial lawyers, they will cut yet another important source of Democratic funding. We can talk about we want to about American democracy, candidates, and voters but that’s nonsense. Incumbents and those who can raise the most amount of money (often incumbents but not always) win elections at staggering rates (well over 90%) in the US at the federal level.

This was a huge victory for the GOP. It basically validates that they can elect governors even in fairly progressive states and crush the power of public employee unions. It handicaps a key source of Democratic fundraising and ultimately organization in the state. Eventually, it will clear the way for GOP positions including wiping out primary public education and instead moving only to a voucher-based only system.

He who has the gold makes the rules. That’s the Golden Rule and the only thing that matters in power politics. This was a huge GOP victory and clears the path for other GOP governors in progressive states to move ahead forward with crushing public employee unions.